IMRIS reports 2013 fourth quarter and full-year financial results

Company completes transition year and lays foundation for profitable
growth;

Quarterly revenues of $10.0 million declined primarily due to the timing
of shipments;

Net loss in the fourth quarter was $21.6 million, or $0.42 per diluted
share, including R&D charges and one-time relocation expenses;

Fourth quarter new order bookings of $11.4 million resulted in an ending
backlog of $102.4 million;

Full-year 2013 revenues totaled $46.0 million compared with $52.4
million in prior year, with gross profit as a percent of sales the same
as 2012;

Company provides 2014 full-year revenue outlook;

Next-generation VISIUS Surgical Theatre received FDA clearance in
February 2014;

First-quarter 2014 booking commitments to date are strong.

Financial Highlights:

3 months ended December 31(unaudited)

Year ended December 31(audited)

($000's except per share amounts)

2013

2012

Change

2013

2012

Change

Sales

9,985

20,095

(50.3%)

46,042

52,392

(12.1%)

Gross profit

2,763

6,996

(60.5%)

15,673

17,798

(11.9%)

Gross profit as % of sales

27.7%

34.8%

n/m [1]

34.0%

34.0%

n/m [1]

Operating expenses

22,597

13,310

69.8%

54,978

45,322

21.3%

Adjusted EBITDA[2]

(18,767)

(4,790)

291.8%

(33,933)

(21,868)

55.2%

Operating loss

(19,834)

(6,314)

214.1%

(39,305)

(27,524)

42.8%

Net loss

(21,615)

(6,602)

227.4%

(42,000)

(27,756)

51.3%

Basic and diluted loss per share

($ 0.42)

($ 0.14)

200.0%

($ 0.83)

($ 0.61)

36.1%

1 Not Meaningful
2 Adjusted EBITDA is defined as earnings before interest income
(expense) and other, stock based compensation, gain on asset sale,
foreign exchange, embedded derivatives, income taxes and amortization
and depreciation.

WINNIPEG and MINNEAPOLIS, March 4, 2014 /PRNewswire/ - IMRIS Inc. (NASDAQ:
IMRS; TSX: IM) today reported financial results for the fourth quarter
and full year ended December 31, 2013. All figures are reported in U.S.
dollars. Fourth quarter revenues were $10.0million compared with $20.1 million for the same period in the prior
year. Net loss in the fourth quarter was $21.6 million, or $0.42 per
diluted share, compared with a prior-year net loss of $6.6 million, or
$0.14 per diluted share.

Commented Jay D. Miller, President and Chief Executive Officer of IMRIS:
"Overall, 2013 was a transition year for IMRIS. We had a number of
things to accomplish in 2013 to improve IMRIS' operations, including:
relocating to Minneapolis key functions and the robotics program, as
well as approximately 100 jobs; completing development work for the
VISIUS® Surgical Theater iMR Skyra and Aera systems, the VISIUS iCT,
important upgrade options and disposables, and the bulk of our
MR-Guided Radiation Therapy (MRgRT) system; implementing a new
multi-source pricing initiative; and expanding the number of
installations. These actions will enable us to achieve our long-term
goals. Strong revenue in the first half of the year was not enough to
overcome lower than anticipated revenue in the fourth quarter, due
partially to a regulatory delay that impacted the shipment of a major
order. This is a timing issue that has been resolved in the first
quarter of 2014."

Added Miller, "After the 2013 fourth-quarter end, we were pleased to
receive FDA clearance on our next-generation VISIUS Surgical Theatre
Skyra and Aera systems. These advanced systems integrate the latest
high-field MR scanners to bring unequaled intraoperative imaging
quality to the surgical suite. The first new generation installation
will be at Dartmouth-Hitchcock Medical Center in Lebanon, New
Hampshire. In addition, first-quarter 2014 bookings commitments have
started well with orders for VISIUS Surgical Theater iMR, VISIUS iCT,
service, options, upgrades and disposables. Going forward, we
anticipate a lower cost structure and higher gross profit as a
percentage of sales in 2014, primarily attributed to improved systems
margins and achieving significantly higher margins for disposable
products. We are now well positioned and excited about IMRIS' long-term
prospects."

Fourth-Quarter Operating Review
Revenue from VISIUS Surgical Theatres for the 2013 fourth quarter was
$6.6 million, $11.8 million lower than the same period last year,
primarily due to the timing of scheduled project deliveries of major
system components. Reflecting IMRIS' focus on building its service
revenues, extended maintenance contract revenue was $1.3 million higher
than the same period last year. The increase stemmed from additional
extended maintenance contracts from a larger installed base that have
transitioned off warranty to chargeable service programs. Other revenue
from disposables and upgrades was $0.4 million higher than the same
period in the prior year.

Net loss in the 2013 fourth quarter of $21.6 million, or $0.42 per
diluted share, was higher than the prior-year quarter chiefly due to
lower gross profit of $4.2 million and higher operating expenses of
$9.3 million, interest expense of $1.0 million and foreign exchange
income of $0.3 million.

Gross profit in the 2013 fourth quarter was $2.8 million compared with
$7.0 million for the same period last year. Impacting gross profit were
the timing of scheduled installation activities, partially offset by
higher gross profit from additional extended maintenance contracts.
Gross profit as a percentage of sales in the 2013 fourth quarter was
27.7 percent compared with 34.8 percent in the prior-year period.

IMRIS continued to invest in order to position the business for
profitable growth. Operating expenses for the 2013 fourth quarter were
$22.6 million compared with $13.3 million for the same period last
year. Operating expenses include expected R&D charges of $8.3 million
related to completion of the collaborative arrangement with Princess
Margaret Hospital for their clinical MRgRT system. Total one-time costs
during the fourth quarter to relocate IMRIS' operations to Minnesota
were $3.5 million, including a lease accrual of $2.1 million related to
the exit from the Winnipeg, Canada manufacturing facility. Other
operating expenses decreased $2.5 million, mainly due to lower expenses
in research and development costs for robotics, MRgRT and other
ancillary research projects as those projects near completion.

Foreign exchange expense in the fourth quarter was $0.6 million compared
with $0.2 million in 2012, due to a strengthening U.S. dollar against
IMRIS' foreign denominated monetary assets. Interest and other expense
includes interest expense of $0.6 million and warrant discount
amortization of $0.3 million, as well as other net interest expense and
banking fees.

Adjusted EBITDA for the 2013 fourth quarter was negative $18.8 million
compared with negative $4.8 million for the same period last year.
Adjusted EBITDA for the 2013 fourth quarter reflects lower gross profit
of $4.2 million, higher operating expenses of $9.3 million which
includes the expected R&D charges of $8.3 million noted above, $3.5
million of relocation charges including $2.1 million related to the
Winnipeg manufacturing facility, and higher interest expense of $1.0
million due to the new debt.

Backlog1
During the 2013 fourth quarter, $11.4 million in new orders were
received and $10.0 million of backlog was converted into revenues. The
change in the U.S. dollar versus the orders denominated in foreign
currencies in backlog resulted in a decrease in the value of the
backlog of $0.4 million. Backlog at December 31, 2013, was $102.4
million.

2013 Full-Year Results and Liquidity
Revenues for the full year ended December 31, 2013, totaled $46.0
million compared with $52.4 million for 2012. Net loss in 2013 was
$42.0 million compared with $27.8 million last year. Net loss was $0.83
per diluted share compared with a loss of $0.61 per diluted share for
2012, primarily due to higher expenses related to the Company's
relocation, and research and development investments.

Gross profit in 2013 was $15.7 million compared with $17.8 million in
2012. Gross profit as a percentage of sales was flat at 34.0 percent
compared to the prior year.

Operating expenses were $55.0 million, up $9.7 million compared with
2012, primarily due to the expected R&D charges and additional one-time
relocation costs, offset by lower research and development costs for
robotics, MRgRT and other projects. Foreign exchange expense was $1.2
million compared with $0.1 million in the prior year, due to a
strengthening U.S. dollar against the Company's foreign denominated
monetary assets.

Taken together, IMRIS had total cash and non-cash operating expenses in
2013 of $55.0 million, as summarized below:

2013

$ Millions

Cash operating expenses

$ 35.5

Minneapolis relocation costs

5.8

Research & development charge

3.3

Total

44.6

Research & development charge (non-cash)

5.0

Amortization and depreciation (non-cash)

3.5

Stock based compensation (non-cash)

1.9

Total operating expenses

55.0

Full-year adjusted EBITDA was negative $33.9 million compared with
negative $21.9 million for the same period last year. The 2013 adjusted
EBITDA reflects lower gross profit of $2.1 million, higher operating
expenses of $9.7 million, which includes the expected R&D charges, $3.5
million of relocation charges and higher interest expense of $1.2
million.

Cash and restricted cash at December 31, 2013, totaled $13.9 million and
accounts receivable were $14.0 million. These funds, together with
ongoing operating cash flow, will be used to fund the Company's working
capital and overall operations.

2014 Business Outlook
Commented Miller: "In 2014, we are focused on executing our strategic
plans in order to set the stage for future growth. We are excited to
have a talented team in place to achieve our goals. IMRIS now offers a
broader product range, including a growing disposables business, and we
plan to continue building momentum for our VISIUS iCT and service
sales. Looking ahead, we expect improved bottom-line performance with
an emphasis on controlling costs, increasing gross margins and becoming
cash flow neutral in 2014. We also anticipate market excitement around
the development of our second generation SYMBIS MR and CT-compatible
robotic system and MRgRT."

IMRIS' primary focus in 2014 will be on improving order bookings
performance and working to convert qualified customer prospects to new
sales orders. Full-year 2014 revenues comprised of systems sales,
service and disposables are expected to be in the range of $44 million
to $46 million. The Company anticipates that its 2014 first quarter
revenues will be in the range of $8 million to $9 million and the
strongest quarterly revenue performance will occur in the second half
of 2014.

Gross profit as a percentage of sales is forecast to be above 40 percent
for the full year 2014. Quarterly gross profit as a percentage of
sales will vary depending on the underlying system installations in
each quarter.

Taken together, IMRIS anticipates total cash and non-cash operating
expenses in 2014 to be approximately $33 million, as summarized below:

2014 Forecast

$ Millions

Cash operating expenses

$ 27.0

Depreciation (non-cash)

4.0

Stock based compensation (non-cash)

2.0

Total operating expenses

33.0

The Company's cash requirements in 2014 include funding for operations,
capital investments related to robotics, iCT and MRgRT test labs, and
costs related to the U.S. relocation. Total capital expenditures in
2014 are expected to be in the range of $1.5 million to $2.5 million.

Conference Call
Management will host a conference call to discuss the results at 5:00 pm ET, March 4, 2014. Following management's presentation, there will be a
question-and-answer session for analysts and institutional investors.
To participate in the teleconference, please call 1-416-644-3416 or 1-800-814-4860. To access the live audio webcast, please visit IMRIS' website at www.imris.com. A taped rebroadcast will be available to listeners following the call
until midnight (ET) on March 11, 2014. To access the rebroadcast from
Canada please call 1-877-289-8525 or 1-416-640-1917 and enter access
code 4665774. From the U.S., please call 1-303-590-3030 or
1-800-406-7325 and enter access code 4665774.

About IMRIS IMRIS (NASDAQ: IMRS; TSX: IM) is a global leader in providing image
guided therapy solutions through its VISIUS Surgical Theatre - a
revolutionary, multifunctional surgical environment that provides
unmatched intraoperative vision to clinicians to assist in decision
making and enhance precision in treatment. The multi-room suites
incorporate diagnostic quality high-field MR, CT and angio modalities
accessed effortlessly in the operating room setting. VISIUS Surgical
Theatres serve the neurosurgical, cardiovascular, spinal and
cerebrovascular markets and have been selected by 57 leading medical
institutions around the world. For more information, visit www.imris.com.

Forward-Looking Statements
This press release may contain or refer to forward-looking information
based on current expectations. In some cases, forward-looking
statements can be identified by terminology such as "anticipate",
"may", "expect", "believe", "prospective", "continue" or the negative
of these terms or other similar expressions concerning matters that are
not historical facts. These statements should not be understood as
guarantees of future performance or results. Such statements involve
known and unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements to be materially different
from those implied by such statements. Although such statements are
based on management's reasonable assumptions, there can be no assurance
that actual results will be consistent with such statements.
Forward-looking statements are subject to significant risks and
uncertainties, and other factors that could cause actual results to
differ materially from expected results. These forward-looking
statements are made as of the date hereof and we assume no
responsibility to update or revise them to reflect new events or
circumstances.

__________________________________ 1 See "Non-GAAP Financial Measures" in the Company's 2013 MD&A for
further information on backlog.